<p>I have a question in advance to April 15 and the filing of tax returns.</p>
<p>DD has been getting excellent financial aid and she is 19 and a dependent on the parental/family tax return. We have yet to do our 2008 taxes and do the FAFSA for next year. </p>
<p>Given that dd worked last year, over the summer and during the school year (work-study), should she file her own tax return? If she does, can she still be considered a dependent?</p>
<p>Your daughter should still file her own tax form even IF you declare her as a dependent…especially if she had money withheld that she can get back.</p>
<p>My kids have filed their own tax returns since they began working at age 16. We still declare them as dependents.</p>
<p>Her filing status with taxes has NOTHING to do with her dependency for financial aid purposes. Is that what you are asking? She is considered your dependent for finaid purposes until she is 24…unless she gets married.</p>
<p>Thanks, thumper. I wasn’t sure if filing her taxes would change her status as our dependent. And, yes, she should get money back.</p>
<p>Thumper is right. Our kids both filed their own tax returns as soon as they started working summer jobs at 16 to get their refunds. If she is in school she can still be a dependent on your return and file her own return as long as she did not provide more than 1/2 her support (check with IRS for definitions). She will get a personal allowance of $5450 (ish) and you can still get the exemption of $3500(ish -can’t think of the exact amounts off hand). If you can not claim her as a dependent for whatever reason then she gets the $3500 personal exemption.</p>
<p>Don’t forget that any grant/scholarship aid over the amount of tuition/fees/required books is taxable income on your daughter’s return.</p>
<p>Would her filing her own return affect our ability to get the tax break for education expenses?</p>
<p>No. The person who claims the student on the return gets the education credits or deduction. That would be you.</p>
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<p>You would do that on YOUR taxes. She would NOT do it on hers. Only ONE of you can do this. In this family, the parents get the tax break (we’re paying the bills).</p>
<p>No. As long as you claim her as a dependent then you can claim the tax breaks. However if you are ineligible to claim her as a dependent and she claims herself as an exemption then she must claim the tax breaks. Except, I think, for interest on education loans taken out by you while she was still your dependent, you can continue to claim them even once she is not longer your dependent.</p>
<p>Education expenses paid by her (for instance with the proceeds of a Stafford loan) are considered to have been paid by you for education tax credit purposes if you claim her as a dependent on your tax return.</p>
<p>Head spinning yet?</p>
<p>IRS 970 is the tax publication with all the education tax information</p>
<p><a href=“http://www.irs.gov/pub/irs-pdf/p970.pdf[/url]”>http://www.irs.gov/pub/irs-pdf/p970.pdf</a></p>
<p>I would think we can claim her as a dependent. She doesn’t make that much money and uses her earnings for books and incidentals.</p>
<p>Most undergrad college students ARE dependents for tax purposes. Their parents are paying WELL OVER half of their living expenses.</p>
<p>Just f.y.i., they remove scholarship money from the equation when determining support. So if kid gets $30,000 in scholarship, and you figure you only paid 10,000 to support her - you still provided more than half support if your kid made less than $10,000.</p>
<p>Thanks, everyone.</p>
<p>This is confusing… so, let’s say that when I attend school next year, it’s all paid for in scholarships and work-study. I use some of my money to travel home and back to school on breaks. My parents contribute $0 to the cost of school and then just have me at home for a bit, either paying nothing or a small amount of money to them. Am I still considered their dependent? (Like, if I’m using my work money to pay for my contribution to school and not using my parents money -at all-)? I was under the impression that you had to do something drastic, like be a ward of the state or something?</p>
<p>I think you are confusing dependent for financial aid with dependent for taxes. They are 2 completely separate things. We are talking about taxes and the dependency rules for them. You are still a dependent for financial aid.</p>
<p>The dependency for tax purposes is a more complicated matter.</p>
<p>I filed my W-2s as exempt, so they don’t take out any taxes. There’s no need for me (a minor and a dependent) to file a tax return because they did not take any of my money. This is a much simpler solution to the problem.</p>
<p>It’s much simpler until you go over the amount needed to file a return and then you’ll owe. Also, keep in mind that the amount needed to file a State return is different.</p>